Who Pays the Hidden Costs of Poor Performance?

August 14, 2012 by Stacey Barr

When we get things wrong, it’s not just our own time that gets wasted. Our customers often suffer too, and more than we are aware. It damages the relationship, and that affects the other results we want, like revenue or referalls. But what to do?

Time is one of the things so many people I know seem to undervalue. They sell it to others for just a few dollars per hour. They spend it in long queues (like the 200m queue for the Catacombes in Paris, or even longer queues for Show Bags at the Ekka).

Maybe this under-valuing of time is one reason why companies seem so disinterested in how much of their customers’ time they waste?

But time is VERY valuable. We can never get it back. So it shouldn’t be wasted. And most importantly, other people’s time shouldn’t be wasted on account of our actions.

This means that when we decide what our performance priorities are, we need to be sure there are no unintended consequences to cause that hidden cost our customers must bear:

When we aim to decrease the cycle time of solving customer’s problems, is there a chance that it will decrease the rate of getting it right first time, and cause more customers to have to come back again?

When we aim to reduce costs in handling enquiries by installing automated voice-prompted answering services, is there a chance that any customers will end up going around in circles because their prompts are not understood?

When we introduce ‘smart’ travel cards to eliminate ticket offices at our stations, what are the risks that we don’t provide a reliable option for customers who don’t travel often enough to warrant carrying around another card in their wallet or purse?

When you’re checking for unintended consequences of pursuing your goals (you do check for unintended consequences, don’t you?), some great questions to ask are:

Will customers have to wait longer?

Will customers have to spend any of their time or money as part of our approach to fixing problems that we caused?

Will customers feel confused or frustrated by the hoops we want them to jump through to access our products or services?

Will it be hard for customers to quickly get help from us when our processes confuse, frustrate or fail them?

And it’s a pretty good idea to ask the customers questions like these too, to find out directly what the actual hidden costs of working with your company or business.

TAKE ACTION: For each goal or objective or target you pursue, always include a step where you explore the potential unintended consequences. This way, you can either prevent or mitigate them before they cause big hassles for you or your customers (or any other stakeholder, for that matter).